NZAuASB Meeting Highlights 12 April 2017

Access the meeting papers here

Here is an outline of the main matters considered.

Code of Ethics: Long Association

The Board considered a draft Invitation to Comment (ITC) and Exposure Draft (ED) on auditor rotation, detailing the New Zealand response to the recent international provisions on long association. The NZAuASB intends to approve the ITC and ED soon, and issue a Communique requesting comments.

The Board is aware that the proposed amendments will have an impact on the audit firms in New Zealand, and encourages your submissions and comments.

Consideration of IESBA Exposure Drafts

The Board considered the draft submissions to the International Ethics Standards Board for Accountants (IESBA) on the following exposure drafts:

  • Proposed Revisions to Clarify the Applicability of Provisions in Part C of the Extant Code to professional Accountants in Public Practice – comments due 25 April
  • Proposed Revisions Pertaining to Safeguards in the Code – Phase 2 and Related conforming amendments – comments due 25 April
  • Improving the Structure of the Code of Ethics for professional accountants -Phase 2, with Certain Proposed Conforming Amendments Arising from the Safeguards Project – comments due 25 May 2017.

The Board is awaiting any further feedback and information from its constituents and information from the Australian Accounting Professional and Ethical Standards Board in respect of its constituent engagement, before finalising the submissions.

We will make the finalised submissions available on the XRB’s website in due course.    

Agreed-upon Procedures

The XRB’s mandate is to issue auditing and assurance standards, including professional and ethical standards for assurance practitioners. Agreed-upon Procedures (AUP), however, do not involve the provision of assurance.  

There is significant demand for a new AUP standard to replace the existing New Zealand standard, which is out of step with international standards.

Cabinet has approved the introduction of legislation to extend this part of the XRB’s mandate to include the issue of standards on AUP and more generally, related services provided by assurance practitioners.

An amending Bill has yet to be introduced to Parliament, but the NZAuASB wishes to be ready to proceed with the development of a standard as soon as (and if) the mandate change occurs.

The Board therefore approved a project plan to commence work leading to the development of an AUP Standard.

Joint project with the FMA on auditor reporting

The NZAuASB and the FMA have agreed to perform a joint review of the New Zealand experience in implementing the new auditor reporting standards and publish a joint report on the outcome.

The objective of the project is to better understand:

  • the value and benefits of the enhanced reporting for all stakeholders; and
  • implementation issues and specific challenges identified, and where further guidance may be needed.

The NZAuASB considered and provided feedback on the outline of the project and the content of the proposed joint report. The intention is to publish the joint report in December 2017. 

Next meeting

7 June 2017